1. Electronics / Taiwan
15 June 2011
Target price: NT$87.00 → NT$117.00
Taiwan Surface Mounting Technology Up/downside: +31.2%
6278 TT Share price (14 Jun): NT$89.20
More than simply an LED-lightbar
story
• We forecast TSMT's sales to rise at a CAGR of about 30% and
profitability to improve for 2011-13 on new business ventures
• In addition to LED lightbars, we forecast new businesses to
account for 24% of sales for 2012
• Buy reaffirmed; target price raised to NT$117, 31% upside potential
How do we justify our view?
the improving profitability (as such, its true value, with its strong execution
we have revised up our 2013 EPS and ability to move ahead of the trend.
forecast by 12.6%) from these new
businesses for the next three years. Forecast revisions (%)
Year to 31 Dec 11E 12E 13E
Chris Lin Revenue change 0.4 1.1 11.3
What we recommend
(886) 2 8788 1614 Net-profit change (4.9) 2.9 12.6
chris.lin@daiwacm-cathay.com.tw The share price has reached our prior EPS change (4.9) 2.9 12.6
target price as investors have started Source: Daiwa forecasts
Jenkins Shiau to price in the LED-lightbar story. We
(886) 2 8789 5105
jenkins.shiau@daiwacm-cathay.com.tw have raised our six-month target price Share price performance
to NT$117.0 (from NT$87.0), based
on a new target PER of 12x (10x
What's new previously) and the average of our
While our investment thesis of rising 2011 and 2012 EPS forecasts of
demand for LED lightbars (49% of the NT$8.32 and NT$11.18, respectively.
company’s 2011E sales) remains intact, We believe TSMT deserves a target 12-month share-price performance
we believe Taiwan Surface Mounting PER of 12x for three reasons: 1) the Relative to Taiwan TAIEX Index
Technology (TSMT) deserves a further tablet-rerating story, 2) potentially
rerating, as we expect a substantial strong EPS growth in 2012 for the 12-month range 60.10-91.30
rise in the contributions from its new new businesses, thanks to order wins Market cap (US$m) 676.08
businesses in: 1) inverter-type printed from Philips and subsidy programmes Average daily turnover (US$m) 8.64
circuit board and assembly (PCBA) for in China, as well as China promoting Shares outstanding (m) 218
white goods in China, and TV-set energy-saving home appliances in its Major shareholder Wang Ying Pa (3.3%)
mainboards for China brands, and 2) 12th Five-Year Plan, and 3) a 12x PER
the electronic manufacturing services is still at about a 15% discount to the Financial summary (NT$)
(EMS) business for LED general current PER of the LED companies Year to 31 Dec 11E 12E 13E
and home-appliance makers, as TSMT Revenue (m) 52,514 68,196 87,215
lighting. Operating profit (m) 3,445 4,880 6,384
is not a pure play in either sector. We
Net profit (m) 1,817 2,443 3,108
What's the impact see the main downside risk as a
Core EPS 8.316 11.184 14.226
Despite the slight 5% downward slower-than-expected ramp-up of the
EPS change (%) 9.3 34.5 27.2
revision to our 2011 EPS forecast to new business ventures. Daiwa vs Cons. EPS (%) n.a. n.a. n.a.
factor in higher-than-expected initial PER (x) 10.7 8.0 6.3
setup costs and operating expenses How we differ Dividend yield (%) 2.6 2.3 3.1
associated with new facilities, we We were the first non-Taiwan broker DPS 2.324 2.026 2.753
believe the market should factor in not to initiate coverage of TSMT and PBR (x) 1.6 1.4 1.3
only the top-line CAGR of about 30% believe it remains under-covered. We ROE (%) 16.4 19.0 21.8
that we forecast for 2011-13, but also expect the company to become more Source: Bloomberg, Daiwa forecasts
widely covered as investors recognise
Important disclosures, including any required research certifications, are provided on the last two pages of this report.
2. Electronics / Taiwan
6278 TT
15 June 2011
How do we justify our view?
Growth outlook
Valuation
Earnings revisions
Growth outlook TSMT: sales and gross profit (2009-13E)
We forecast TSMT’s sales to rise at a CAGR of about (NT$m) (%)
30% for 2011-13 and its profitability to improve over the 100,000 10.6
same period on rising shipments, and in particular, an 90,000 10.4
increasing sales contribution from its new businesses in 80,000 10.2
70,000
LED general lighting and home appliances. 60,000
10.0
9.8
50,000
9.6
In addition to LED lightbars (the main driver of TSMT’s 40,000
30,000 9.4
revenue growth this year, in our view), we believe the 9.2
20,000
market should start factoring in the company’s new 10,000 9.0
businesses, which we forecast to account for 24% of its 0 8.8
2012 sales (10% from LED general lighting, 8% from 2009 2010 2011E 2012E 2013E
TV-set mainboards, and 6% from white goods). Sales (LHS) Gross Margin (RHS)
Source: Company, Daiwa forecasts
Valuation TSMT: one-year forward PER bands
The share price has reached our previous target price as (NT$)
investors have started to price in the LED-lightbar story. 100 10x
We have raised our target price to NT$117.0, based on a 90
new target PER of 12x and the average of our 2011 and 80 8x
2012 EPS forecasts of NT$8.32 and NT$11.18, respectively. 70
We believe TSMT deserves a 12x target PER for three 60 6x
reasons: 1) the tablet-rerating story, 2) potentially strong 50
EPS growth in 2012 for new businesses, thanks to order 40 4x
wins from Philips (Not rated) and two subsidy 30
20
programmes in China, as well as China’s promoting of
10
energy-saving home appliances in its 12th Five-Year Plan,
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
and 3) a 12x PER is still at about a 15% discount to the
current PER at which the LED companies and home- Source: Company, Daiwa forecasts
appliance makers are trading.
Earnings revisions TSMT: Daiwa forecast revisions
Capacity expansion for new businesses should result in New Previous Diff. (%)
(NT$m) 201E 2012E 2011E 2012E 2011E 2012E
slightly higher operating costs, along with additional
Sales 52,514 68,196 52,290 67,463 0 1
costs associated with setting up new facilities in 2011, Gross profit 5,008 6,800 5,072 6,775 (1) 0
than we expected previously. As such, we have revised Margin (%) 9.5 10.0 9.7 10.0
down our 2011 EPS forecast by a mild 5%. Operating profit 3,445 4,880 3,641 4,683 (5) 4
Margin (%) 6.6 7.2 7.0 6.9
Pre-tax profit 3,516 4,941 3,712 4,737 (5) 4
Nonetheless, we forecast a top-line CAGR of about 30% Margin (%) 6.7 7.2 7.1 7.0
for 2011-13 with an additional sales contribution from Net income 1,817 2,443 1,910 2,374 (5) 3
the new businesses. To reflect the improving Margin (%) 3.5 3.6 3.7 3.5
profitability from rising shipments of higher gross- EPS (NT$) 8.32 11.18 8.74 10.87 (5) 3
margin products, we have revised up our 2012 and 2013 Source: Daiwa forecasts
Note: net income is after minority interests
EPS forecasts by 2.9% and 12.6%, respectively.
-2-
5. Electronics / Taiwan
6278 TT
15 June 2011
The LED-lightbar story remains
intact
More than simply an We forecast LED-lightbar sales to account for 49% of
TSMT’s 2011 sales. We believe there is more to the
LED-lightbar story simple logic of an increasing number of LED-backlit
displays implying more LED-lightbar shipments, which
should result in TSMT benefitting increasingly from
While demand for LED lightbars the rise in the adoption of LEDs.
continues to rise, we think TSMT deserves
First, we expect the company to gain market share in
a re-rating as the earnings from its new both LED-monitor and LED-TV applications from a
business ventures become more low base, while it already has a 30% market share in
substantial LED-notebook applications. Second, new tablet and TV
designs are likely to require more LED lightbars as the
requirements for display resolution become more
Sales CAGR of about 30% and stringent and overall LED costs continue to fall.
profitability expected to improve TSMT: sales breakdown by product area (2010-12E)
for 2011-13 Sales mix (%)
2.1% 2.7%
100% 2.0% 9.6%
We forecast TSMT’s sales to rise at a CAGR of about 80%
4.6% 5.6%
8.0%
42%
30% for 2011-13 and its profitability to improve over 49%
60%
the same period on rising shipments and in particular, 42%
an increasing sales contribution from its new 40%
businesses in LED general lighting and home 20%
56%
42% 35%
appliances.
0%
2010 2011E 2012E
TSMT: sales and gross profit (2009-13E)
Control Board Lightbar
TV-set Mainboard White Home Appliance (White Goods)
(NT$m) (%) LED Lighting
100,000 10.6
90,000 Source: Company, Daiwa forecasts
10.4
80,000 10.2
70,000
60,000
10.0 LED-lightbar market share in the monitor
9.8
50,000 and TV-BLU segments should double
9.6
40,000
30,000 9.4 Aside from the fact that nearly 100% of notebooks and
20,000 9.2 tablets are already LED-backlit in 2011 (this according
10,000 9.0 to DisplaySearch), TSMT is benefiting from the rising
0 8.8
demand globally for LED backlight units (BLU) from
2009 2010 2011E 2012E 2013E
both monitors and TVs on the back of increasing
Sales (LHS) Gross Margin (RHS)
adoption of LEDs in both applications. It is gaining
Source: Company, Daiwa forecasts traction in the monitor segment, in which we forecast
its global market share to double to 11% for 2011 (from
a low base of 5% for 2010) and the TV segment, in
which we also forecast its market share to more than
double to 3% (from a very low base of 1.2% for 2010).
TSMT has not been affected by the reduction in the
number of LED lightbars used for mainstream TV sets
following last year’s product transition (from six to four
initially, then from four to two, then from two to one
currently), and is actually gaining market share and
shipment traction.
-5-
6. Electronics / Taiwan
6278 TT
15 June 2011
2010-13E LED-lightbar shipments by application
(m units) The inverter-type compressor/motor is being
160 adopted increasingly in white goods. An inverter-type
140 compressor eliminates the stop-start cycles for some
120 models through electrical modulation, thus increasing
110.2
100 100.6 power efficiency, extending the life of the components,
87.0
80 and helping reduce sharp fluctuations in the load the
60 68.1 appliances place on the power supply. Eventually, this
40 28.0 makes inverter-type models not only less prone to
22.7 26.5
20 9.2
11.0 17.0 19.7 21.6 breaking down and cheaper to run than traditional
0
models, but also reduces their mechanical noise.
2010 2011E 2012E 2013E
TVs Monitors Notebooks
A PCBA board is a PC board that is populated with
Source: Company, Daiwa forecasts electronic components (chips, passive components, etc.)
through surface-mount, hole fixing and conformal
New designs require more LED lightbars coating (to prevent corrosion, current leakage, or short
Nevertheless, some brand makers are using an circuit) technologies.
increasing number of LED lightbars to enhance display
resolution as LED-chip costs decline further. In the Working with Philips on LED-general
first instance, our channel checks indicate that the lighting
number of LED lightbars adopted in the design of a TSMT has gained Philips’ trust from past business
third-generation tablet by a renowned US consumer- relationships in making controller boards for displays
electronic brand maker is likely to double from those and has just been qualified as one of its major EMS
used in its second-generation tablet. The purpose of makers for electrical ballasts. Including Philips’ sales
this new tablet design is to increase resolution in order contribution, TSMT’s sales from lighting should
to compete with peers making tablet-like products. increase from less than 3% for 2011 to 10-15% for 2012,
and TSMT should account for 50% of Philips’ ballast
Second, based on some new-design specifications, we demand in China by 2011, according to management’s
believe the number of LED lightbars used in TV sets guidance for its LED-general-lighting business.
could triple or quadruple for those models with quasi-
local-dimming features (to enhance the contrast ratio) Moreover, our sources indicate it is also working with
when LED-chip costs drop further, which we envisage Philips on: 1) developing a cost-competitive LED light
will occur toward the end of this year. bulb through the ODM model, and 2) manufacturing
OEM products for LED general lighting fixtures.
New businesses expected to LED electrical ballast and LED light bulb
account for 24% of 2012E sales
TSMT’s long-term goal is to reach balanced sales
contributions from three main categories: 1) EMS for
LED general lighting, starting with electric ballasts,
then ODM/OEM products (light bulbs, fixtures, etc.), 2)
control boards for China-brand TFT-LCD displays, and
3) inverter-type PCBA for energy-saving white goods. Source: Daiwa
In addition to LED lightbars (which we expect to be Riding on the wave of urbanisation in tier-
TSMT’s main revenue-growth driver this year), we
believe investors should begin to factor in the
3 and tier-4 cities in China
company’s new business-growth drivers, which we In its efforts to urbanise third- and fourth-tier cities in
forecast to account for 24% of the company’s 2012 sales China while promoting energy-saving home appliances,
(10% from LED general lighting, 8% from TV-set the PRC Government is offering nationwide subsidies;
mainboards, and 6% from white goods). thus boosting home-appliance demand. We believe
TSMT is set to ride on this big wave and benefit from
We go on to provide a brief introduction of two this strong growth trend.
mentioned components for its new businesses that are
starting to contribute more substantially:
-6-
7. Electronics / Taiwan
6278 TT
15 June 2011
In our view, TSMT’s foray into the home-appliance China: annual air-conditioner shipments and growth
space in China is a good strategy that will benefit from Units ('000) YoY (%)
two government subsidy programmes (the rural 100,000 60%
subsidies scheme for home-appliance purchases, and the 80,000 40%
old-for-new home-appliance subsidy scheme), as well as 60,000 20%
China’s 12th Five-Year Plan which promotes energy- 40,000 0%
saving home appliances. 20,000 (20%)
0 (40%)
TV set mainboards: We forecast this part of the 2003 2004 2005 2006 2007 2008 2009 2010
business to contribute 5% of sales for 2011, from China Export shipments (k units, LHS)
Domestic shipments (k units, LHS)
TV brands like Hisense (Not rated), and Haier (Not Total sell-through shipments YoY (%, RHS)
rated), and to account for 8% of sales for 2012. Export shipments YoY (%, RHS)
Domestic shipments YoY (%, RHS)
China: annual LCD-TV shipments and growth Source: IDN
Units ('000) YoY (%)
China: annual refrigerator shipments and growth
90,000 100%
80,000
70,000 80% Units ('000) YoY (%)
60,000 70,000 60%
50,000 60%
40,000 60,000 50%
40% 50,000
30,000 40%
20,000 20% 40,000
10,000 30%
30,000
0 0% 20%
20,000
2007 2008 2009 2010 10,000 10%
Export shipments (k units, LHS) 0 0%
Domestic shipments (k units, LHS)
Total sell-through shipments YoY (%, RHS) 2007 2008 2009 2010
Export shipments YoY (%, RHS) Export shipments (k units, LHS)
Domestic shipments YoY (%, RHS) Domestic shipments (k units, LHS)
Total sell-through shipments YoY (%, RHS)
Source: IDN Export shipments YoY (%, RHS)
Domestic shipments YoY (%, RHS)
Printed-circuit-board assembly (PCBA) for Source: IDN
white goods: We forecast the sales contribution from
this segment to increase from 2% of sales for 2011 to We believe the shipment momentum will continue to
6% of sales for 2012, attributed mostly by China home- rise, boosted by: 1) the two subsidy programmes and
appliance makers Gree Electric Appliances (Not rated), the promoting of energy-saving home appliance
GD Midea Holding (Not rated) and Hisense. purchases, and 2) urbanisation of tier-3 and tier-4
cities in China.
Triggered by the government’s subsidy schemes and
the 12th Five-Year Plan promoting energy-saving home By entering the China home-appliances market, we
appliances, overall demand for white goods recorded believe TSMT’s overall sales and earnings performance
significant growth in 2010 (more than 25% YoY will benefit from the increase in demand in the next
demand growth for washing machines, more than 35% few years.
YoY for air conditioners and more than 30% YoY for
refrigerators, according to IDN).
Conviction Buy with 31% upside
China: annual washing-machine shipments and growth potential
Units ('000) YoY (%)
60,000 40% We maintain our Buy [1] rating and have raised our six-
50,000 30%
40,000
month target price to NT$117.0 (implying 31% upside
20% potential), based on a new target PER of 12x (from 10x
30,000
10%
20,000 previously) and average 2011 and 2012 EPS forecasts of
10,000 0%
NT$8.32 and NT$11.18, respectively. The 12x PER is at
0 (10%)
about a 15% discount to the current PER of the LED
2006 2007 2008 2009 2010
companies and home-appliance makers, as it is not a pure
Export shipment (k units, LHS)
Domestic shipment (k units, LHS) play in both sectors.
Total sell-through shipment YoY (%, RHS)
Export shipment YoY (%, RHS)
Domestic shipment YoY (%, RHS)
Source: IDN
-7-
8. Electronics / Taiwan
6278 TT
15 June 2011
We believe the counter deserves a 12x target PER as its In our opinion, the major downside risk would be
new businesses start to contribute thanks to the two slower-than-expected ramp-up of the new business
subsidy programmes and the focus of the 12th Five- ventures.
Year Plan on promoting energy-saving home
appliances.
TSMT: comparison of main product lines
LCD control boards LED lightbars White home appliances (white
Item (panel drivers) (back light drivers) TV set mainboards goods) LED lighting
Year of launch Since 2000 Since 2007 Since July 2010 Since April 2011 Since 2010
2011/2012 sales mix (%) 42/35 49/42 5/8 2/6 3/10
Current monthly output 13-14m pcs >10m pcs 1m pcs 300-400k na
ASP US$4-6 US$6-11 > US$9 US$12-13.5 na
Gross-profit margin 9-11% 8-9% 5-6% 10-15% > 10%
Global brand-name accounts - Haier - Gree Electric Appliances,
- AUO
that go through backlight unit - Hisense
Major clients - CMI - GD Midea Holding - White brand distribution
makers like Radiant, Coretronic, - Briview (for Toshiba and
- Samsung - Haier
and Nano Optoelectronics Panasonic)
- Philips
- Sharp
Prospects - Toshiba - Sharp - Hisense - OSRAM
- Wistron
- GE
- Lite-On Tech (2301 TT,
- Universal Scientific Industrial
- GIO Optoelectronics (Not NT$36.55, Underperform [4[)
(merged with ASE [Not rated]) - FIH (Not rated)
listed) - Delta (2308 TT, NT$106,Sell
Major competitors - WUS (Not rated) - Panel makers - Huntkey (Not listed)
- Wellypower (Not rated) [5])
- FDK-Fuchi (Not listed) - Brand makers
- Lextar (Not listed) - Bright LED (Not rated)
- Qisda (Not rated)
- Unity Opto (Not rated)
Source: Company, compiled by Daiwa
TSMT: quarterly and yearly financial summary
2011E 2012E
(NT$m, year-end Dec) 1Q 2QE 3QE 4QE 1QE 2QE 3QE 4QE 2011E 2012E
Revenue 10,388 12,578 14,418 15,129 14,797 15,998 18,095 19,306 52,514 68,196
Depreciation & amortisation (169) (176) (200) (223) (243) (260) (277) (294) (768) (1,075)
COGS (9,436) (11,424) (13,010) (13,636) (13,334) (14,422) (16,250) (17,391) (47,506) (61,396)
Gross profit 953 1,155 1,407 1,493 1,463 1,576 1,845 1,915 5,008 6,800
Operating expense (271) (401) (450) (442) (418) (449) (510) (542) (1,563) (1,920)
EBIT 682 754 958 1,051 1,045 1,127 1,335 1,373 3,445 4,880
Net interest income 5 3 1 (0) (1) (1) (2) (3) 9 (7)
Net other income 20 13 14 15 15 16 18 19 62 68
Pre tax profit 707 769 973 1,066 1,058 1,142 1,352 1,389 3,516 4,941
Tax (196) (226) (243) (267) (265) (331) (338) (347) (932) (1,281)
Net profit 347 391 518 560 556 551 659 677 1,817 2,443
EPS (NT$) 1.59 1.79 2.37 2.56 2.54 2.52 3.02 3.10 8.32 11.18
Key drivers
Control-board shipments (m) 45.4 51.5 58.2 58.8 56.6 60.4 64.1 64.5 213.8 245.7
Lightbar shipments (m) 25.6 32.3 34.2 34.5 34.2 36.9 38.0 37.7 126.7 146.8
Margins (%)
Gross-profit margin 9.2 9.2 9.8 9.9 9.9 9.9 10.2 9.9 9.5 10.0
Operating-profit margin 6.6 6.0 6.6 6.9 7.1 7.0 7.4 7.1 6.6 7.2
EBITDA margin 8.2 7.4 8.0 8.4 8.7 8.7 8.9 8.6 8.0 8.7
Net-profit margin 3.3 3.1 3.6 3.7 3.8 3.4 3.6 3.5 3.5 3.6
Sequential growth (%)
Revenue (0.7) 21.1 14.6 4.9 (2.2) 8.1 13.1 6.7 29.5 29.9
Gross profit (4.3) 21.2 21.8 6.1 (2.0) 7.7 17.1 3.8 22.4 35.8
EBIT (2.8) 10.5 27.0 9.8 (0.6) 7.9 18.5 2.8 12.4 41.7
Net profit 5.9 12.6 32.5 8.0 (0.7) (0.7) 19.5 2.7 11.9 34.5
EPS 5.9 12.6 32.5 8.0 (0.7) (0.7) 19.5 2.7 9.3 34.5
Source: Company, Daiwa forecasts
Note: net profit is after minority interests
-8-
10. Daiwa’s Asia Pacific Research Directory
Hong Kong
Regional Research Head; Pan Asia Research Nagahisa MIYABE (852) 2848 4971 nagahisa.miyabe@hk.daiwacm.com
Regional Research Co-head Christopher LOBELLO (852) 2848 4916 christopher.lobello@hk.daiwacm.com
Head of Product Management John HETHERINGTON (852) 2773 8787 john.hetherington@hk.daiwacm.com
Product Management Tathagata Guha ROY (852) 2773 8731 tathagata.guharoy@hk.daiwacm.com
Head of China Research; Chief Economist (Greater China) Mingchun SUN (852) 2773 8751 mingchun.sun@hk.daiwacm.com
Macro Economy (Hong Kong, China) Kevin LAI (852) 2848 4926 kevin.lai@hk.daiwacm.com
Regional Chief Strategist; Strategy (Regional) Colin BRADBURY (852) 2848 4983 colin.bradbury@hk.daiwacm.com
Strategy (Regional) Mun Hon THAM (852) 2848 4426 munhon.tham@hk.daiwacm.com
Head of Hong Kong Research; Regional Property Coordinator; Jonas KAN (852) 2848 4439 jonas.kan@hk.daiwacm.com
Co-head of Hong Kong and China Property; Property Developers (Hong Kong)
Automobiles and Components (China) Jeff CHUNG (852) 2773 8783 jeff.chung@hk.daiwacm.com
Head of Greater China FIG; Banking (Hong Kong, China) Grace WU (852) 2532 4383 grace.wu@hk.daiwacm.com
Banking (Hong Kong, China) Queenie POON (852) 2532 4381 queenie.poon@hk.daiwacm.com
Insurance Jennifer LAW (852) 2773 8745 jennifer.law@hk.daiwacm.com
Capital Goods –Electronics Equipments and Machinery; IT/Electronics – Tech Hardware Joseph HO (852) 2848 4443 joseph.ho@hk.daiwacm.com
(Hong Kong, China)
Consumer/Retail (Hong Kong, China) Peter CHU (852) 2848 4430 peter.chu@hk.daiwacm.com
Consumer/Retail (China) Nicolas WANG (852) 2848 4963 nicolas.wang@hk.daiwacm.com
Head of HK and China Gaming and Leisure; Hotels, Restaurants and Leisure – Casinos Gavin HO (852) 2532 4384 gavin.ho@hk.daiwacm.com
and Gaming (Hong Kong); Capital Goods – Conglomerate (Hong Kong)
Regional Head of IT/Electronics; IT/Electronics – Semiconductor and Solar Pranab Kumar SARMAH (852) 2848 4441 pranab.sarmah@hk.daiwacm.com
(Regional, Taiwan, Singapore, Hong Kong and China)
Co-head of Regional IT/Electronics; IT/Electronics – Semiconductor/IC Design (Regional) Eric CHEN (852) 2773 8702 eric.chen@hk.daiwacm.com
IT/Technology Hardware – PC Hardware (Taiwan) Calvin HUANG (852) 2773 8782 calvin.huang@hk.daiwacm.com
IT/Electronics - Semiconductor/IC Design (Taiwan) Ashley CHUNG (852) 2848 4431 ashley.chung@hk.daiwacm.com
Regional Head of Materials; Materials/Energy (Regional) Alexander LATZER (852) 2848 4463 alexander.latzer@hk.daiwacm.com
Materials (China) Felix LAM (852) 2532 4341 felix.lam@hk.daiwacm.com
Pan Asia Research, Consumer, Pharmaceuticals and Healthcare (China) Hongxia ZHU (852) 2848 4460 hongxia.zhu@hk.daiwacm.com
Pan Asia Research Kenji SERIZAWA (852) 2532 4159 kenji.serizawa@hk.daiwacm.com
Head of Hong Kong and China Property; Property Developers (Hong Kong, China) Danny BAO (852) 2773 8715 danny.bao@hk.daiwacm.com
Property (Hong Kong, China) Yannis KUO (852) 2773 8735 yannis.kuo@hk.daiwacm.com
Regional Head of Small/Medium Cap; Small/Medium Cap (Regional) Mark CHANG (852) 2773 8729 mark.chang@hk.daiwacm.com
Small/Medium Cap (Regional) John CHOI (852) 2773 8730 john.choi@hk.daiwacm.com
Regional Head of Telecommunications; Telecommunications (Regional, Greater China); Marvin LO (852) 2848 4465 marvin.lo@hk.daiwacm.com
Internet (China)
Transportation – Aviation, Land and Transportation Infrastructure (Regional) Kelvin LAU (852) 2848 4467 kelvin.lau@hk.daiwacm.com
Transportation –Transportation Infrastructure; Capital Goods – Construction and Edwin LEE (852) 2532 4349 edwin.lee@hk.daiwacm.com
Engineering (China)
Regional Head of Clean Energy and Utilities; Utilities; Power Equipment; Dave DAI (852) 2848 4068 dave.dai@hk.daiwacm.com
Renewables (Hong Kong, China)
Head of Custom Products Group; Custom Products Group Justin LAU (852) 2773 8741 justin.lau@hk.daiwacm.com
Custom Products Group Philip LO (852) 2773 8714 philip.lo@hk.daiwacm.com
Custom Products Group Jibo MA (852) 2848 4489 jibo.ma@hk.daiwacm.com
South Korea
Head of Research; Strategy; Banking/Finance Chang H LEE (82) 2 787 9177 chlee@kr.daiwacm.com
Regional Head of Automobiles and Components; Automobiles; Shipbuilding; Steel Sung Yop CHUNG (82) 2 787 9157 sychung@kr.daiwacm.com
Banking/Finance Anderson CHA (82) 2 787 9185 anderson.cha@kr.daiwacm.com
Capital Goods (Construction and Machinery) Mike OH (82) 2 787 9179 mike.oh@kr.daiwacm.com
Consumer/Retail Sang Hee PARK (82) 2 787 9165 sanghee.park@kr.daiwacm.com
IT/Electronics (Tech Hardware and Memory Chips) Jae H LEE (82) 2 787 9173 jhlee@kr.daiwacm.com
IT Electronics (Tech Hardware) Steve OH (82) 2 787 9195 steve.oh@kr.daiwacm.com
Materials (Chemicals); Oil and Gas Daniel LEE (82) 2 787 9121 daniel.lee@kr.daiwacm.com
Pan Asia Research; Small/Medium Caps Yumi KIM (82) 2 787 9838 yumi.kim@kr.daiwacm.com
Telecommunications; Software (Internet/Online Games) Thomas Y KWON (82) 2 787 9181 yskwon@kr.daiwacm.com
Custom Products Group Shannen PARK (82) 2 787 9184 shannen.park@kr.daiwacm.com
- 10 -
11. Taiwan
Head of Taiwan Research; Pan Asia Research Hirokazu Mitsuda (886) 2 2758 8754 h.mitsuda@daiwacm-cathay.com.tw
Co-head of Research; Strategy Alex YANG (886) 2 2345 3660 alex.yang@daiwacm-cathay.com.tw
Consumer/Retail Yoshihiko KAWASHIMA (886) 2 8780 5987 y.kawashima@daiwacm-cathay.com.tw
IT/Technology Hardware (Communications Equipment); Software; Small/Medium Caps Christine WANG (886) 2 8788 1531 christine.wang@daiwacm-cathay.com.tw
IT/Technology Hardware (Handsets and Components) Alex CHANG (886) 2 8788 1584 alex.chang@daiwacm-cathay.com.tw
IT/Technology Hardware (PC Hardware - Panels) Chris LIN (886) 2 8788 1614 chris.lin@daiwacm-cathay.com.tw
IT/Technology Hardware (PC Components) Jenny SHIH (886) 2 8780 1326 jenny.shih@daiwacm-cathay.com.tw
Materials; Conglomerates Albert HSU (886) 2 8786 2212 albert.hsu@daiwacm-cathay.com.tw
India
Head of India Equities Strategy Jaideep GOSWAMI (91) 22 6622 1010 jaideep.goswami@in.daiwacm.com
Deputy Head of Research; Strategy; Banking/Finance Punit SRIVASTAVA (91) 22 6622 1013 punit.srivastava@in.daiwacm.com
All Industries; Pan Asia Research Fumio YOKOMICHI (91) 22 6622 1003 fumio.yokomichi@in.daiwacm.com
Automobiles Ambrish MISHRA (91) 22 6622 1060 ambrish.mishra@in.daiwacm.com
Capital Goods; Utilities Jonas BHUTTA (91) 22 6622 1008 jonas.bhutta@in.daiwacm.com
Materials Vishal CHANDAK (91) 22 6622 1006 vishal.chandak@in.daiwacm.com
Oil & Gas; Construction; Small/Medium Caps Atul RASTOGI (91) 22 6622 1020 atul.rastogi@in.daiwacm.com
Pharmaceuticals and Healthcare; Consumer Kartik A. MEHTA (91) 22 6622 1012 kartik.mehta@in.daiwacm.com
Real Estate Amit AGARWAL (91) 22 6622 1063 amit.agarwal@in.daiwacm.com
Singapore
Head of Research; Pan Asia Research Tatsuya TORIKOSHI (65) 6321 3050 tatsuya.torikoshi@sg.daiwacm.com
Chief Economist, Asia Ex-JP; Macro Economy (Regional) Prasenjit K BASU (65) 6321 3069 p-k.basu@sg.daiwacm.com
Global Director of Quantitative Research; Quantitative Research Deep KAPUR (65) 6321 3079 deep.kapur@sg.daiwacm.com
Quantitative Research Josh CHERIAN (65) 6499 6549 josh.cherian@sg.daiwacm.com
Quantitative Research Suzanne HO (65) 6499 6545 suzanne.ho@sg.daiwacm.com
Regional Head of Banking/Finance; Banking; Property and REITs David LUM (65) 6329 2102 david.lum@sg.daiwacm.com
Banking (ASEAN) Srikanth VADLAMANI (65) 6499 6570 srikanth.vadlamani@sg.daiwacm.com
Consumer; Food and Beverage; Small/Medium Cap (ASEAN) Pyari MENON (65) 6499 6566 pyari.menon@sg.daiwacm.com
Regional Head of Oil and Gas; Oil and Gas (ASEAN and China); Capital Goods (Singapore) Adrian LOH (65) 6499 6548 adrian.loh@sg.daiwacm.com
Head of ASEAN & India Telecommunications; Telecommunications (ASEAN & India) Ramakrishna MARUVADA (65) 6499 6543 ramakrishna.maruvada@sg.daiwacm.com
Australia
Resources/Mining/Petroleum David BRENNAN (61) 3 9916 1323 david.brennan@au.daiwacm.com
Japan
Industrials (Regional); Pan Asia Research Taiki KAJI (81) 3 5555 7174 taiki.kaji@jp.daiwacm.com
Industrials (Regional); Pan Asia Research Daijiro HATA (81) 3 5555 7178 daijiro.hata@jp.daiwacm.com
- 11 -
12. Daiwa’s Office
Office / Branch / Affiliate Address Tel Fax
DAIWA SECURITIES GROUP INC
HEAD OFFICE Gran Tokyo North Tower, 1-9-1, Marunouchi, Chiyoda-ku, Tokyo, 100-6753 (81) 3 5555 3111 (81) 3 5555 0661
Daiwa Securities Trust Company One Evertrust Plaza, Jersey City, NJ 07302, U.S.A. (1) 201 333 7300 (1) 201 333 7726
Daiwa Securities Trust and Banking (Europe) PLC (Head Office) 5 King William Street, London EC4N 7JB, United Kingdom (44) 207 320 8000 (44) 207 410 0129
Daiwa Securities Trust and Banking (Europe) PLC (Dublin Branch) Level 3, Block 5, Harcourt Centre, Harcourt Road, Dublin 2, Ireland (353) 1 603 9900 (353) 1 478 3469
DAIWA CAPITAL MARKETS LIMITED
HEAD OFFICE Gran Tokyo North Tower, 1-9-1, Marunouchi, Chiyoda-ku, (03) 5555 3111 (03) 5555 0661
Tokyo, 100-6753
Daiwa Capital Markets America Inc Financial Square, 32 Old Slip, New York, NY10005, U.S.A. (1) 212 612 7000 (1) 212 612 7100
Daiwa Capital Markets America Inc. San Francisco Branch 555 California Street, Suite 3360, San Francisco, CA 94104, U.S.A. (1) 415 955 8100 (1) 415 956 1935
Daiwa Capital Markets Europe Limited 5 King William Street, London EC4N 7AX, United Kingdom (44) 20 7597 8000 (44) 20 7597 8600
Daiwa Capital Markets Europe Limited, Frankfurt Branch Trianon Building, Mainzer Landstrasse 16, 60325 Frankfurt am Main, (49) 69 717 080 (49) 69 723 340
Federal Republic of Germany
Daiwa Capital Markets Europe Limited, Paris Branch 127, Avenue des Champs-Elysées, 75008 Paris, France (33) 1 56 262 200 (33) 1 47 550 808
Daiwa Capital Markets Europe Limited, Geneva Branch 50 rue du Rhône, P.O.Box 3198, 1211 Geneva 3, Switzerland (41) 22 818 7400 (41) 22 818 7441
Daiwa Capital Markets Europe Limited, Milan Branch Via Senato 14/16, 20121 Milan, Italy (39) 02 763 271 (39) 02 763 27250
Daiwa Capital Markets Europe Limited, 25/9, build. 1, Per. Sivtsev Vrazhek, Moscow 119002, Russian Federation (7) 495 617 1960 (7) 495 244 1977
Moscow Representative Office
Daiwa Capital Markets Europe Limited, Bahrain Branch 7th Floor, The Tower, Bahrain Commercial Complex, P.O. Box 30069, (973) 17 534 452 (973) 17 535 113
Manama, Bahrain
Daiwa Capital Markets Europe Limited, Dubai Branch The Gate village Building 1, 1st floor, Unit-6, DIFC, P.O.Box-506657, (971) 47 090 401 (971) 43 230 332
Dubai, UAE.
Daiwa Capital Markets Hong Kong Limited Level 26, One Pacific Place, 88 Queensway, Hong Kong (852) 2525 0121 (852) 2845 1621
Daiwa Capital Markets Singapore Limited 6 Shenton Way #26-08, DBS Building Tower Two, Singapore 068809, (65) 6220 3666 (65) 6223 6198
Republic of Singapore
Daiwa Capital Markets Australia Limited Level 34, Rialto North Tower, 525 Collins Street, Melbourne, (61) 3 9916 1300 (61) 3 9916 1330
Victoria 3000, Australia
DBP-Daiwa Capital Markets Philippines, Inc 18th Floor, Citibank Tower, 8741 Paseo de Roxas, Salcedo Village, (632) 813 7344 (632) 848 0105
Makati City, Republic of the Philippines
Daiwa-Cathay Capital Markets Co Ltd 14/F, 200, Keelung Road, Sec 1, Taipei, Taiwan, R.O.C. (886) 2 2723 9698 (886) 2 2345 3638
Daiwa Securities Capital Markets Co Ltd, Seoul Branch 6th Floor, Hana Daetoo Securities Bldg 27-3, Yeouido-Dong, (82) 2 787 9100 (82) 2 787 9191
Yeongdeungpo-Gu, Seoul, Republic of Korea
Daiwa Securities Capital Markets Co Ltd, Room 3503/3504, SK Tower, (86) 10 6500 6688 (86) 10 6500 3594
Beijing Representative Office No.6 Jia Jianguomen Wai Avenue, Chaoyang District,
Beijing 100022, People’s Republic of China
Daiwa SSC Securities Co Ltd Room 011, 45F HSBC Tower, 1000 Lujiazui Ring Road, (86) 21 6859 8000 (86) 21 6859 8030
Pudong New Area, Shanghai 200120,
People’s Republic of China
Daiwa Securities Capital Markets Co. Ltd, Level 8 Zuellig House, 1 Sliom Road, (66) 2 231 8381 (66) 2 231 8121
Bangkok Representative Office Bangkok 10500, Thailand
Daiwa Capital Markets India Private Ltd 10th Floor, 3 North Avenue, Maker Maxity, Bandra Kurla Complex, (91) 22 6622 1000 (91) 22 6622 1019
Bandra East, Mumbai – 400051, India
Daiwa Securities Capital Markets Co. Ltd, Suite 405, Pacific Palace Building, 83B, Ly Thuong Kiet Street, (84) 4 3946 0460 (84) 4 3946 0461
Hanoi Representative Office Hoan Kiem Dist. Hanoi, Vietnam
DAIWA INSTITUTE OF RESEARCH LTD
HEAD OFFICE 15-6, Fuyuki, Koto-ku, Tokyo, 135-8460, Japan (81) 3 5620 5100 (81) 3 5620 5603
MARUNOUCHI OFFICE Gran Tokyo North Tower, 1-9-1, Marunouchi, Chiyoda-ku, Tokyo, 100-6756 (81) 3 5555 7011 (81) 3 5202 2021
New York Research Center 11th Floor, Financial Square, 32 Old Slip, NY, NY 10005-3504, U.S.A. (1) 212 612 6100 (1) 212 612 8417
London Research Centre 3/F, 5 King William Street, London, EC4N 7AX, United Kingdom (44) 207 597 8000 (44) 207 597 8550
- 12 -
13. Disclaimer
This publication is produced by Daiwa Securities Capital Markets Co. Ltd. and/or its non-U.S. affiliates, and distributed by Daiwa Securities Capital Markets Co. Ltd. and/or its non-U.S.
affiliates, except to the extent expressly provided herein. This publication and the contents hereof are intended for information purposes only, and may be subject to change without further
notice. Any use, disclosure, distribution, dissemination, copying, printing or reliance on this publication for any other purpose without our prior consent or approval is strictly prohibited.
Neither Daiwa Securities Capital Markets Co. Ltd. nor any of its respective parent, holding, subsidiaries or affiliates, nor any of its respective directors, officers, servants and employees,
represent nor warrant the accuracy or completeness of the information contained herein or as to the existence of other facts which might be significant, and will not accept any responsibility or
liability whatsoever for any use of or reliance upon this publication or any of the contents hereof. Neither this publication, nor any content hereof, constitute, or are to be construed as, an offer
or solicitation of an offer to buy or sell any of the securities or investments mentioned herein in any country or jurisdiction nor, unless expressly provided, any recommendation or investment
opinion or advice. Any view, recommendation, opinion or advice expressed in this publication may not necessarily reflect those of Daiwa Securities Capital Markets Co. Ltd., and/or its affiliates
nor any of its respective directors, officers, servants and employees except where the publication states otherwise. This research report is not to be relied upon by any person in making any
investment decision or otherwise advising with respect to, or dealing in, the securities mentioned, as it does not take into account the specific investment objectives, financial situation and
particular needs of any person.
Daiwa Securities Capital Markets Co. Ltd., its parent, holding, subsidiaries or affiliates, or its or their respective directors, officers and employees from time to time have trades as principals, or
have positions in, or have other interests in the securities of the company under research including derivatives in respect of such securities or may have also performed investment banking and
other services for the issuer of such securities. The following are additional disclosures.
Japan
Daiwa Securities Capital Markets Co. Ltd and Daiwa Securities Group
Daiwa Securities Capital Markets Co. Ltd and Daiwa Securities Group: Daiwa Securities Capital Markets Co. Ltd is a subsidiary of Daiwa Securities Group.
Investment Banking Relationship
Within the preceding 12 months, The Affiliates of Daiwa Securities Capital Markets Co. Ltd.* has lead-managed public offerings and/or secondary offerings (excluding straight bonds) of the
securities of the following companies: Patel Engineering (PEC IN); International Taifeng Holdings Limited (873 HK); Sihuan Pharmaceutical Holdings Group Limited (460 HK); Strides
Arcolab Limited (STR IN); China Metal Resources Holding Limited (8071 HK); China 33 Media Group Limited (8087 HK); Sabana Shari’ah Compliant Industrial Real Estate Investment Trust
(SSREIT SP); SBI Holdings Inc. (6488 HK).
*Affiliates of Daiwa Securities Capital Markets Co. Ltd. for the purposes of this section shall mean any one or more of:
• Daiwa Capital Markets Hong Kong Limited
• Daiwa Capital Markets Singapore Limited
• Daiwa Capital Markets Australia Limited
• Daiwa Capital Markets India Private Limited
• Daiwa-Cathay Capital Markets Co., Ltd.
• Daiwa Securities Capital Markets Co. Ltd., Seoul Branch
Hong Kong
This research is distributed in Hong Kong by Daiwa Capital Markets Hong Kong Limited (“DHK”) which is regulated by the Hong Kong Securities and Futures Commission. Recipients of this
research in Hong Kong may contact DHK in respect of any matter arising from or in connection with this research.
Ownership of Securities
For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at http://www2.us.daiwacm.com/report_disclosure.html.
Investment Banking Relationship
For “Investment Banking Relationship”, please visit BlueMatrix disclosure Link at http://www2.us.daiwacm.com/report_disclosure.html.
Relevant Relationship (DHK)
DHK may from time to time have an individual employed by or associated with it serves as an officer of any of the companies under its research coverage.
DHK market making
DHK may from time to time make a market in securities covered by this research.
Singapore
This research is distributed in Singapore by Daiwa Capital Markets Singapore Limited and it may only be distributed in Singapore to accredited investors, expert investors and institutional
investors as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. By virtue of distribution to these category of
investors, Daiwa Capital Markets Singapore Limited and its representatives are not required to comply with Section 36 of the Financial Advisers Act (Chapter 110) (Section 36 relates to
disclosure of Daiwa Capital Markets Singapore Limited’s interest and/or its representative’s interest in securities). Recipients of this research in Singapore may contact Daiwa Capital Markets
Singapore Limited in respect of any matter arising from or in connection with the research.
Australia
This research is distributed in Australia by Daiwa Capital Markets Stockbroking Limited and it may only be distributed in Australia to wholesale investors within the meaning of the
Corporations Act. Recipients of this research in Australia may contact Daiwa Capital Markets Stockbroking Limited in respect of any matter arising from or in connection with the research.
Ownership of Securities
For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at http://www2.us.daiwacm.com/report_disclosure.html.
India
This research is distributed by Daiwa Capital Markets India Private Limited (DAIWA) which is an intermediary registered with Securities & Exchange Board of India. This report is not to be
considered as an offer or solicitation for any dealings in securities. While the information in this report has been compiled by DAIWA in good faith from sources believed to be reliable, no
representation or warranty, express of implied, is made or given as to its accuracy, completeness or correctness. DAIWA its officers, employees, representatives and agents accept no liability
whatsoever for any loss or damage whether direct, indirect, consequential or otherwise howsoever arising (whether in negligence or otherwise) out of or in connection with or from any use of
or reliance on the contents of and/or omissions from this document. Consequently DAIWA expressly disclaims any and all liability for, or based on or relating to any such information
contained in or errors in or omissions in this report. Accordingly, you are recommended to seek your own legal, tax or other advice and should rely solely on your own judgment, review and
analysis, in evaluating the information in this document. The data contained in this document is subject to change without any prior notice DAIWA reserves its right to modify this report as
maybe required from time to time. DAIWA is committed to providing independent recommendations to its Clients and would be happy to provide any information in response to any query
from its Clients. This report is strictly confidential and is being furnished to you solely for your information. The information contained in this document should not be reproduced (in whole or
in part) or redistributed in any form to any other person. We and our group companies, affiliates, officers, directors and employees may from time to time, have long or short positions, in and
buy sell the securities thereof, of company(ies) mentioned herein or be engaged in any other transactions involving such securities and earn brokerage or other compensation or act as advisor
or have the potential conflict of interest with respect to any recommendation and related information or opinion. DAIWA prohibits its analyst and their family members from maintaining a
financial interest in the securities or derivatives of any companies that the analyst cover. This report is not intended or directed for distribution to, or use by any person, citizen or entity which
is resident or located in any state or country or jurisdiction where such publication, distribution or use would be contrary to any statutory legislation, or regulation which would require DAIWA
and its affiliates/ group companies to any registration or licensing requirements. The views expressed in the report accurately reflect the analyst’s personal views about the securities and
issuers that are subject of the Report, and that no part of the analyst’s compensation was, is or will be directly or indirectly, related to the recommendations or views expressed in the Report.
This report does not recommend to US recipients the use of Daiwa Capital Markets India Private Limited or any of its non – US affiliates to effect trades in any securities and is not supplied
with any understanding that US recipients will direct commission business to Daiwa Capital Markets India Private Limited.
Taiwan
This research is distributed in Taiwan by Daiwa-Cathay Capital Markets Co., Ltd and it may only be distributed in Taiwan to institutional investors or specific investors who have signed
recommendation contracts with Daiwa-Cathay Capital Markets Co., Ltd in accordance with the Operational Regulations Governing Securities Firms Recommending Trades in Securities to
Customers. Recipients of this research in Taiwan may contact Daiwa-Cathay Capital Markets Co., Ltd in respect of any matter arising from or in connection with the research.
- 13 -
